Ad-Supported Video Streaming’s Impact on the Music Industry: What to Expect
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Ad-supported video streaming subscriptions are on the rise, but what does this mean for the music industry? Let’s explore how this trend might affect artists and their revenue.
In 2024, ad-supported video streaming services offering ad-free tiers saw a significant increase in subscriptions in the US. Ad-supported tiers grew by nearly 50%, while ad-free subscriptions declined by 5%. Major platforms like Netflix, HBO Max, and Disney+ all saw a rise in ad-supported subscribers, with Netflix leading the pack.
The shift towards ad-supported streaming could also impact the music streaming market. Major platforms are experiencing slower subscription growth, prompting discussions on charging for ad-supported listening. Spotify, for example, has seen a decline in premium subscribers in the US. However, its ad-supported tier is thriving, with a record 402 million monthly active users in Q3 2024.
The growth of ad-supported streaming may mean lower royalties for artists, as ad-supported listening typically generates less revenue per stream compared to premium subscriptions. Despite challenges in monetizing ad-supported users, there is resilience in premium subscription growth globally.
As streaming platforms adapt to achieve long-term profitability, we are seeing changes in strategies like diversification into audiobooks and acquisitions in fast-growing markets. The evolving landscape of music streaming raises questions about the future of the industry and its impact on artists, platforms, and labels.
The dynamics between ad-supported and premium subscribers will continue to shape the streaming industry, with implications for revenue distribution and artist earnings. Stay tuned as the music streaming landscape evolves to meet the changing demands of listeners worldwide.
